US reports link Navistar and VW

Media reports in the US suggest that giant German automotive maker Volkswagen (VW) is considering a takeover bid of leading truck and bus manufacturing company Navistar.

Navistar is, of course, the parent of International and dominant partner in the Cat Trucks operation in Australia.

According to some reports, Volkswagen is not just content to battle Toyota for supremacy in the car business but also wants to fight German compatriot Daimler for global supremacy in truck manufacturing.

Daimler, of course, owns Freightliner and Western Star, with the former now surpassing International as America’s leading heavy truck brand.

High profile European brands Scania and MAN are already controlled by VW and the appointment of long-serving Scania chief Leif Ostling as head of VW’s truck and bus operations is seen as a sign of Volkswagen’s intention to keep its heavy commercial vehicle businesses on the boil.

Some pundits suggest a Navistar take-over would be a crowning achievement for the 67 year-old Leif Ostling.

Further fuelling take-over speculation is the fact that Navistar has significant debts which won’t be easily overcome. These include a recent quarterly loss of US$172 million attributed to stalled truck sales caused by emissions certification problems and a costly backflip on its much-touted EGR emissions platform.

Indeed, the extent of Navistar’s debt could be ultimately a major factor in keeping prospective bidders at bay.

Ironically though, Navistar already has some synergies with Volkswagen’s MAN: Its 12.4 litre MaxxForce 13 engine is largely an MAN design, built under licence in the US. The same engine is also the platform of Cat’s upcoming CT13 engine.

As for the future of the MaxxForce 15 engine project if a VW takeover of Navistar took place, the prospects probably wouldn’t be good. The MaxxForce 15 is, after all, based on core hardware from Caterpillar and VW would probably work quickly to find an alternative among its MAN and Scania stocks.